Merrill Lynch just announced it would raise $8.5 billion by selling new stock–an emergency move necessary to save the firm’s crumbling balance sheet. CEO John Thain says that the firm will now have enough capital. Of course, he’s said that before:
Reuters: “One of my first priorities at Merrill Lynch was to strengthen the firm’s balance sheet, and today we have made great progress towards that by bolstering our capital position through these investments and our announced sale of Merrill Lynch Capital.” (December 24, 2007 — Thain in a statement when Merrill announced a $6.2 billion capital raise)
“…These transactions make certain that Merrill is well-capitalised.” (January 15, 2008 — Thain in a statement after selling $6.6 billion of preferred shares to a group that included Japanese and Kuwaiti investors)
“We’re very confident that we have the capital base now that we need to go forward in 2008.” (January 18, 2008 — Thain as quoted by the New York Times)…
And finally, just 12 days ago:
“Right now we believe that we are in a very comfortable spot in terms of our capital.” (July 17, 2008 — Thain on a conference call after posting Merrill’s second-quarter results)
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